Rental by a non-resident
Arefieva Maria asks:
Hello!
I am a resident of the Russian Federation. I want to purchase commercial property (hotel) in Croatia. Can I arrange a hotel for myself as an individual and rent it out to DOO to a resident of Croatia. What taxes will need to be paid? Will there be changes in taxes if I will be the founder and director of this DOO?
I am a resident of the Russian Federation. I want to purchase commercial property (hotel) in Croatia. Can I arrange a hotel for myself as an individual and rent it out to DOO to a resident of Croatia. What taxes will need to be paid? Will there be changes in taxes if I will be the founder and director of this DOO?
Expert answers (1)
(Vuleta d.o.o.)
Good afternoon!
The law does not prohibit the purchase and registration of a commercial property on an individual - a foreigner. It is important that the object is inside the urban area.
The income (excluding expenses of 30%) of a non-resident from renting (we mean NOT a daily tourist rent) is subject to income tax of 12% - this situation is described on the official website of the tax office.
DOO, in turn, pays taxes and deductions according to its status and turnover, it can be: VAT, income tax, deductions for employees. Your presence at DOO as a founder / member of the board will cost the company an additional 3,100 kunas (420 euros) per month.
Unfortunately, only EU citizens can rent (per diem / tourist). The only possible option is exactly what you wrote about, i.e. "transfer" an object to a legal entity / individual who can engage in relevant activities.
From personal experience, I would advise contacting the tax office at the location of the property with a request to clarify the situation with income tax. Or send a written request. The request can be sent from the tax page https://www.porezna-uprava.hr/kontakti/Stranice/Pi%C5%A1ite-nam.aspx, where you need to describe the situation.
The law does not prohibit the purchase and registration of a commercial property on an individual - a foreigner. It is important that the object is inside the urban area.
The income (excluding expenses of 30%) of a non-resident from renting (we mean NOT a daily tourist rent) is subject to income tax of 12% - this situation is described on the official website of the tax office.
DOO, in turn, pays taxes and deductions according to its status and turnover, it can be: VAT, income tax, deductions for employees. Your presence at DOO as a founder / member of the board will cost the company an additional 3,100 kunas (420 euros) per month.
Unfortunately, only EU citizens can rent (per diem / tourist). The only possible option is exactly what you wrote about, i.e. "transfer" an object to a legal entity / individual who can engage in relevant activities.
From personal experience, I would advise contacting the tax office at the location of the property with a request to clarify the situation with income tax. Or send a written request. The request can be sent from the tax page https://www.porezna-uprava.hr/kontakti/Stranice/Pi%C5%A1ite-nam.aspx, where you need to describe the situation.
7.02.2020
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